The heterogeneous reaction of green and conventional bonds to exogenous shocks and the hedging implications.

Unlike most previous studies considering the yields on green bonds versus conventional bonds or the hedging ability of green bonds against downside market risk, the main purpose of this paper is to paper examine the short-term response of green and conventional bonds to the Russia-Ukraine conflict shock and the US Federal monetary policy tightening. Using daily data from August 3, 2021 to March 29, 2022, this paper conducts an event-based study (Cumulative Abnormal Returns, CAR) and then applies a hedging analysis in the context of increasing geopolitical risk and financial stress. The analysis reveals that green bonds exhibit a stronger reaction to the Russia-Ukraine conflict and the US Federal rate hike than conventional, municipal, and treasury bonds in different time frames. Compared to conventional, municipal, and treasury bonds, green bonds offer lower negative CAR responses during the event window and the [-5, +5] period, suggesting a rigidity feature. The dynamic correlation and hedging analysis indicate that green bonds, unlike the other bonds indices, have a negative dynamic correlation with both geopolitical risks and financial stress, implying a hedging ability around the conflict shock and the Federal tightening cycle. These findings enrich the existing literature on green bonds, offering a wide range of applications for investment managers and policymakers.

The impact of geopolitical risk, institutional governance and green finance on attaining net-zero carbon emission.

This research investigates the impact of geopolitical risk, institutional governance and green finance on environmental outcomes, specifically focusing on carbon emissions and ecological footprint. Utilizing the dynamic CS-ARDL method and aggregated mean group analysis on a panel dataset covering 21 nations from 2000 to 2021, our findings reveal that heightened geopolitical risk leads to both short and long run increases in carbon emissions and the ecological footprint. Our study finds both a direct as well as indirect connection between governance, green finance and environmental outcomes in both the short and long run, highlighting the nuanced impact of governance on the formulation of environmental policies and regulatory frameworks. The results emphasize the need for targeted strategies, including focused investments and incentives for sustainable finance, particularly in conflict-affected regions. Furthermore, our research underscores the enduring impact of historical events, such as wars, on contemporary environmental indicators, emphasizing the importance of proactive conflict prevention measures. Our research suggests that policymakers should adopt comprehensive strategies that prioritize emission reduction during short-run spikes in geopolitical risk while maintaining a steadfast commitment to long-run sustainability.

Time-varying effects of fuel prices on stock market returns during COVID-19 outbreak.

This article explores the impact of fuel price movements on the stock market return of 2020 during the COVID-19 disruptions. In doing so, a monthly data of seven selected stock market indices representing developed and emerging economies globally was used for analysis. The study used a time-varying parameter VAR model to examine a time-varying causal association between oil prices and stock market returns and a novel quantile-causality approach to capture the fluctuations of these markets under COVID-19's varying market conditions. The study further utilises the entropy transfer approach to capture the Granger-causal relationship in the presence of nonlinearities of the data series. The results indicate a high information flow from fuel prices to the FTSE-100, Pacific, and European stock indicies, but not the other way round. The results show that, for the FTSE-100 and the European region, there is a two-way information flow between equities and natural gas, and vice-versa. However, a one-way information flow was established from the stock market to the Pacific and emerging economies.

Systematic and Unsystematic Determinants of Sectoral Risk Default Interconnectedness.

Assessing the financial stability of the banking industry, particularly in credit risk management, has become extremely crucial in times of uncertainty. Given that, this paper aims to investigate the determinants of the interconnectedness of sectoral credit risk default for developing countries. To that purpose, we employ a dynamic credit risk model that considers a variety of macroeconomic indicators, bank-specific variables, and household characteristics. Moreover, the SURE model is used to analyze empirical data. We find the connection between macroeconomic, bank-specific, and household characteristics, and sectoral default risk. The outcomes of macroeconomic factors demonstrate that few macroeconomic determinants significantly influence the sector's default risk. The empirical results of household components reveal that educated households play a substantial role in decreasing sectoral loan defaults interconnectedness and vice versa. While for bank-specific characteristic, we find that greater bank profitability and specialization have substantially reduced loan defaults.

The gender gap in access to finance: Evidence from the COVID-19 pandemic.

Using gender as a theoretical framework, we analyse the dynamics of debt and equity financing during the COVID-19 pandemic for a cross-country sample of 8,921 private firms. We provide evidence of a slight gender bias in debt financing, with creditors favouring female entrepreneurs when dealing with cash flow problems during the COVID-19 pandemic. We find no evidence of gender bias in equity financing. The results are robust after controlling for a larger number of firm-specific characteristics and selection bias. We challenge the assumption of "gender-based discrimination" in the debt market, speculating that in the context of high uncertainty, prototypical forms of femininity may be advantageous as financial institutions seek to hedge their risk by favouring more conservative borrowers.

Environmental performance and firm financing during COVID-19 outbreaks: Evidence from SMEs.

The COVID-19 pandemic has resulted in substantial constraints for small and medium enterprises (SMEs) worldwide. The techniques in which SMEs handle recent crises and the degree to which environmental performance is advantageous when the marketplace experiences an adverse shock is fairly untouched in the literature. To assess this probability, we examine, using data from 6,597 SMEs in 13 developing countries, the effect of firm environmental efficiency on firm financing during the COVID-19 outbreak. We consider three aspects of external financing - bank, non-bank and trade credit - and suggest that it pays for firms to show devotion to environmental obligations in a global pandemic. Our research implies that the trust between a firm and its stakeholders, if it is based on environmental performance, pays off during periods of shock and adversity.

Impact of institutional quality on sustainable development: Evidence from developing countries.

Efficient environmental resource management is a serious concern for sustainable development in developing countries. This study determines the impact of institutional quality on sustainable development, based on total factor productivity improvements through the environmental regulatory process by way of abatement policies using an augmented endogenous sustainable growth model. Based on panel data covering 66 developing countries from 1984 to 2019, the employed methods involve the fixed effects and the system generalized method of moments (GMM). The main results indicate that institutional quality has a positive impact on sustainable development. Institutional quality has a more positive role in sustainable development in lower middle-income countries than low-income countries. The overall results indicate that the disaggregated performance of institutional quality variables is higher in lower middle-income countries than low-income countries. Two main policy implications are implied by our analyses: legislative backing in the form of institutional enforcement is mandatory to design efficient and productive policy relevant to environmental resource management; and various institutional forms should be considered when designing environmental resource protection policy from an environmental governance point of view.

Covid-19 health policy intervention and volatility of Asian capital markets.

The Covid-19 pandemic continues to disturb the global economy and capital markets. Governments across the globe relentlessly enact health policy measures to contain coronavirus and undertake economic relief programs to reduce the impacts on their economies. This paper examines the effects of Covid-19 government health measures on the volatility of capital markets in East Asian economies. The study applies Monte Carlo type simulations to determine stock price volatility over the period when health policy measures were implemented. The findings indicate that different health policy measures have affected investors' behavior and caused volatility of stock markets. However, there are country-different impacts on the volatility of these capital markets. The findings provide important insights that are useful when reviewing Covid-19 health policy measures to mitigate the impacts on stock markets.

Moderating role of cynicism about organizational change between authentic leadership and commitment to change in Pakistani public sector hospitals.

PURPOSE: This study aims to explore the moderating role of cynicism about change in the positive relationship between authentic leadership and employee commitment to change. DESIGN/METHODOLOGY/APPROACH: This study used an exploratory research design with deductive approach to invite responses of doctors, nurses and para medical staff of public sector district hospitals, set to be privatized, on structured close-ended questionnaires. Data gathered from four hospitals chosen because they were undergoing restructuring that facilitated the testing of our propositions were analyzed through structural equation modeling using AMOS. A total of 271 usable responses (response rate of 65 per cent) were analyzed. Interaction and simple slope tests were applied to test moderating effects. FINDINGS: Results indicate that authentic leadership is positively related to commitment to change. Cynicism about change moderated this positive relationship such that a high level of authentic leadership has a stronger impact on commitment to change when cynicism is low rather than when cynicism is high. PRACTICAL IMPLICATIONS: Results show that in Pakistani hospitals undergoing restructuring, leaders who use authentic leadership will have followers who are more committed to enacting the planned changes, but this effect is magnified if followers are not cynical about the change. Thus, regulators of public sector hospitals may benefit from this study by developing authenticity in hospital leaders to mitigate cynicism about and enhance their commitment to change. ORIGINALITY/VALUE: This study is the first which has explored relationships among cynicism about change, authentic leadership and commitment to change in a privatization context of Pakistan. Findings should be tested in other cultural contexts to determine generalizability.